Michigan Judges Guide to the Servicemembers Civil Relief Act

7. MISCELLANEOUS PROTECTIONS
7.1. Tax Protections
7.1.1. Residency for Tax Purposes
A servicemember does not lose or acquire residency status for tax
purposes due to his/her presence in a state for compliance with military
orders. 149 Furthermore, military compensation is not “income” for state
tax purposes in a state where the servicemember is a non-resident. 150
Similarly, for tax purposes, a servicemember’s personal property is not
deemed to be located in a state where the servicemember is a nonresident.
151
7.1.2. Property Tax
The Act provides relief to servicemembers from tax assessments that fall
due and remain unpaid before or during military service. 152 This
protection applies to taxes for personal property and real property acquired
for dwelling, professional, business or agricultural purposes by a
servicemember or the servicemember’s dependents or employees. 153 It
further prevents assessment of any additional penalties or interest above
6% for the nonpayment. 154
7.1.3. Limitation on Sale of Property to Enforce Tax Assessment
Qualifying property cannot be sold to enforce the collection of a tax or
assessment, unless by court order and upon the court’s determination that
149 Id. at § 571(a).
150 Id. at § 571(b). But see, US v State of Kan, 580 F Supp 512 (DC Kan, 1984) (recognizing that the Act
prohibits the use of military compensation as taxable “income” for nonresidents, yet holding that it may be
considered in a formula to determine the rate of taxation for state income of nonresidents), aff’d, 810 F2d 935 (10 th
Cir 1987).
151 50 USC App § 571(c); Dameron v Brodhead, 345 US 322; 73 S Ct 721; 97 L Ed 1041 (1953) (holding
that an Army officer’s personal property could not be taxed by Colorado for the time he was in the state while
assigned to military duty, because he was domiciled in Louisiana).
152 50 USC App § 561(a).
153 Id. But see, Farran v Wayne County, No 261185, 2005 WL 2219417 (Mich App, 2005) (finding that
50 USC App §561 does not apply to vacant land, because it is not occupied for dwelling, professional, business, or
agricultural purposes as required under the Act).
154 50 USC App § 561(d).